Leverage borrowing—also known as margin borrowing—is a powerful financial tool that allows traders to amplify their trading positions by borrowing funds. This method increases both potential profits and risks, making it essential for investors to understand how leverage borrowing works before diving in. In this comprehensive guide, we’ll walk you through the process of borrowing with leverage on a major digital asset platform, using manual mode for full control over your trades.
Whether you're new to crypto trading or looking to expand your knowledge, understanding leverage borrowing, margin trading, and borrowing for short selling can significantly enhance your strategic options. Let’s explore how to borrow with leverage, step by step.
What Is Leverage Borrowing?
Leverage borrowing enables traders to borrow capital—either in cryptocurrency or stablecoins—to increase their trading position size beyond what their own funds would allow. By using borrowed assets, investors can potentially magnify returns from small price movements.
This form of trading is especially popular in volatile markets like cryptocurrencies, where even minor swings can lead to substantial gains—or losses—when amplified by leverage.
While the concept may seem straightforward, the execution involves several steps, including collateral transfer, loan initiation, trade execution, and timely repayment. It requires patience, precision, and risk awareness.
👉 Discover how easy it is to start leveraged trading today.
Step-by-Step Guide: How to Borrow with Leverage
Follow these clear steps to perform leverage borrowing in manual mode on a leading exchange platform:
Step 1: Access the Trading Interface
Log into your account and navigate to the Trading section. Select Contracts, then choose your desired trading pair—for example, BTC/USDT.
Step 2: Enable One-Click Borrow Mode
Click the gear icon in the top-right corner of the interface. Under “Isolated Margin Mode Settings,” select One-Click Borrow Mode. Choose the specific trading pair you wish to use this feature for.
Step 3: Switch to Manual Borrowing Mode
By default, the system operates in manual mode. Before placing a trade, ensure you first transfer funds from your main wallet to your margin account.
Step 4: Transfer Collateral
Go to the Transfer section. Enter the amount you'd like to move as collateral—say, 10,000 USDT—from your funding account to your one-click borrow account. Confirm the transfer. This serves as security for your loan.
Step 5: Initiate the Loan
Now determine how much additional capital you need. If your target trading size is 20,000 USDT and you’ve already transferred 10,000 USDT, you’ll need to borrow the remaining 10,000 USDT. Confirm the borrowing request.
Step 6: Execute Your Trade
With 20,000 USDT now available, enter the current BTC price (e.g., 20,000 USDT per BTC) and the quantity you want to buy. Click Buy (Long) to open a long position.
Step 7: Close the Long Position
Assume BTC rises to 30,000 USDT. To exit profitably, input the new price and the amount of BTC you hold, then click Sell (Short) to close your long position.
Step 8: Confirm the Transaction
Review all details and confirm the sell order. Once executed, your one-click borrow account balance will reflect the proceeds—30,000 USDT in this case.
Step 9: Repay the Borrowed Amount
To fully close the position and avoid ongoing interest charges, go to Borrow & Repay, switch to Repay, and enter the amount of USDT you borrowed (10,000 USDT). Confirm repayment.
Step 10: Transfer Funds Back
After repayment, any remaining funds stay in your margin account. To return them to your main wallet, go to Transfer > Withdraw, enter the desired amount, and confirm.
Completing these steps ensures responsible management of leveraged positions and helps minimize unnecessary costs.
Can You Use Leverage Borrowing for Short Selling?
Yes—leverage borrowing is not only useful for going long but also essential for short selling in cryptocurrency markets.
Short selling involves borrowing an asset (like BTC) when you expect its price to fall. You immediately sell it at the current market price, wait for the value to drop, then repurchase it at a lower cost and return it to the lender—keeping the difference as profit after deducting fees and interest.
For example:
- You borrow 1 BTC when it’s priced at 30,000 USDT.
- You sell it immediately for 30,000 USDT.
- Later, BTC drops to 24,000 USDT.
- You buy back 1 BTC for less and repay the loan.
- Your profit: 6,000 USDT minus interest and fees.
This strategy allows traders to profit in both rising and falling markets—but comes with significant risks.
👉 Learn how to execute short-selling strategies with precision.
Frequently Asked Questions (FAQ)
Q1: What are the main risks of leverage borrowing?
The primary risks include amplified losses due to market volatility, liquidation if collateral value drops too low, and accumulating interest if loans aren’t repaid promptly. Always monitor your position closely and use stop-loss tools when possible.
Q2: How is interest calculated on borrowed funds?
Interest is typically charged per hour or minute based on real-time borrowing rates. The longer you keep a loan open, the more interest accrues. Rates fluctuate depending on supply and demand for the asset.
Q3: Can my account be liquidated during leverage trading?
Yes. If the value of your collateral falls below a certain maintenance threshold due to adverse price movement, the system may automatically liquidate your position to cover the debt.
Q4: Is leverage borrowing suitable for beginners?
While accessible, leverage trading carries higher risk than spot trading. Beginners should start with small amounts, use low leverage ratios (like 2x or 3x), and thoroughly test strategies in demo environments before committing real funds.
Q5: Do I have to repay borrowed coins immediately?
No—you can keep borrowed funds as long as your margin ratio remains above the required level. However, delaying repayment increases interest costs and exposure to market swings.
Key Tips for Safe Leverage Borrowing
- Always begin with adequate collateral.
- Set clear profit targets and stop-loss levels.
- Avoid maxing out leverage; higher multiples increase liquidation risk.
- Regularly check open positions and interest accruals.
- Prefer isolated margin over cross-margin unless experienced.
Understanding margin trading, leverage borrowing, short selling mechanics, and risk management is crucial for success in advanced trading strategies.
👉 Start practicing leveraged trades with confidence and control.
Final Thoughts
Leverage borrowing opens doors to greater market participation with limited capital. When used wisely, it can boost returns and enable strategic moves like short selling in declining markets. However, it demands discipline, technical understanding, and constant vigilance.
Before engaging in any leveraged transaction, take time to learn the mechanics, simulate trades, and assess your risk tolerance. With proper preparation and tools at hand, leverage can become a valuable part of your trading toolkit—not a source of avoidable loss.
Remember: knowledge is your best collateral.